ALBAWABA – Qatar is offering looser liquefied natural gas (LNG) contracts with shorter periods and lower prices, according to Bloomberg, in an attempt to secure a larger market share to meet supply growth from expansion projects, against rising competition with the United States (US).
Bangladesh signed a deal with Qatar with more lenient payment deadlines last week, the New York-based news outlet reported.
The purpose of this adjustment is to lower costs for emerging Asian nations who struggle with prices or are unable to commit to long-term contracts, sources told Bloomberg.
Qatar recently started working on the world’s largest LNG expansion project, which would boost output by more than 60 percent through 2027.
The Gulf country’s strict contracts traditionally deterred buyers from both Japan and Europe from committing to additional deals, as they have plans to shift to renewable energy sources, Bloomberg explained.
As of last week, Qatar is offering shorter durations, less than 20 years.
The Bangladesh deal was signed for 15 years at roughly a 12.6 percent link to Brent crude oil, plus $0.50 per million British thermal units, as reported by Bloomberg.
Buyers in China, India, Taiwan and Pakistan are currently in talks with Qatar for more supply, anonymous sources have informed Bloomberg.
Qatar’s Energy Minister Saad al-Kaabi said last month that the nation could finalize all of its supply deals for its expansion by the end of the year.
